SB 353: The saga continues

by Jason Bloome

First, a big thank you to those of you who took the time to write letters of support for SB 353 to the Assembly Appropriations Committee. Some of the larger organizations who wrote in support of the bill include the L.A. Alzheimer's Association, the Grey Panthers, AARP, the United Nurses Association, the American Parkinson's Disease Association, the Salvation Army, the County Welfare Directors Association, the Little Hoover Commission, as well as numerous Area Agencies on Aging. What follows is a bit of a lengthy saga about the peaks and valleys of the political process and the current fate of SB 353 which would allow the California Department of Health to apply for a home and community based service waiver (HCBS) to permit MediCal to pay for assisted living homes for seniors at risk of institutionalization. Currently, thirty-eight states allow Medicaid to pay for assisted living homes.

John Amber, West Coast Assistant Director of the American Parkinson's Disease Association, and I flew up to Sacramento on August 20th a few days before the scheduled vote on the bill in the Assembly Appropriations Committee. Although SB 353 has so far passed unopposed out of the Senate and the Assembly Health Committee, we knew the real fight would occur in the Assembly Appropriations Committee (the last step before a full vote by the Assembly before going to the Governor). As the name applies, the committee concerns itself with the fiscal impact new laws will have on the State of California.

As far as we knew, there were two obstacles, political and fiscal, facing us in this committee. As you may recall, this year Dion Aroner introduced AB 499 a bill almost identical to SB 353 but which differed significantly in that it proposed to develop a research and demonstration pilot program whereas SB 353 intended to implemented a full state wide waiver. Our concern with AB 499 is it's nature as the slow, tentative cousin of SB 353. AB 499 would take just as much time to develop as a full state wide waiver (development takes about one year), would only cover a few target cities (and no large urban areas like San Diego, Los Angeles, etc.) and could last for as long as five years. It is inconceivable to imagine a low income senior who happened to have the poor luck of living in a major metropolitan area being forced into a SNF while the state spends five years to realize the merits of a HCBS waiver. AB 499 had good intentions, it just didn't go far enough.

From the it's very outset, AB 499 was stalled in the Assembly. It was considered fiscally uncertain and was put on what is called suspend status (meaning the leadership gets together to discuss the bill, it's cost to the State of California and if they want to permit it to move forward for a full vote). Aroner decided to make her AB 499 a two year bill (meaning she will try to get it passed when new bills are introduced in 2000).

Since Aroner is an influential Democrat in a Democratically controlled Assembly and Senate we expected a similar fate to fall our bill, especially considering Senator Johannessen, who introduced SB 353, is a Republican. (Why the political affiliation of the elected official who introduces a good bill should influence it's fate is beyond us, but such is the nature of politics.) Allowing a Republican bill to go for a vote by the Assembly Appropriations Committee when a similar Democratic bill was put on suspend would ruffle a few political feathers.

Our first job was to neutralize the bill as a Democratic vs. Republic issue. To do this, John and I approached many key Democratic members of the Assembly and asked them to coauthor SB 353.

That early Friday morning we met with staffers for Sheila Keuhl, Gill Cedillo and Kevin Shelley, all influential Democratic Assembly Appropriations Committee members who were very sympathetic to our cause. They could see no problem in their bosses coauthoring SB 353, should that be necessary. We learned a bit about the political process when Erin O'Keefe, staffer for Assemblyman Shelley, suggested one political maneuver we could utilize if the partisan parentage of SB 353 became an issue. She suggested they could gut one of their bills currently in the Senate and replace it with the language for SB 353, thus making the bill a Democratic one, abet with a different bill number.

We didn't intend to employ this tactic just yet. (Shelley and Keuhl have subsequently coauthored SB 353.)e also wanted to hedge our bets so that if the bill ended up in suspend status we would have some powerful allies to lift it off and move it forward. A few weeks ago, John and I met with Jimmy Blackman, a staffer from Antonio Villaraigosa's office.

Assemblyman Villaraigosa is the Assembly Speaker and as such would be part of the coalition discussing bills on suspend status in the Assembly. Their office seemed very favorable towards the bill and Jimmy suggested they would be willing to help us with the bill, if it became necessary.

Politics notwithstanding, we still had to make sure that SB 353 made prudent, fiscal sense to the right people. Many of us sent letters to Bill Wehrle who is responsible for doing the fiscal analysis for bills in the Assembly Appropriations Committee. Our letters focused on the fiscal merits of SB 353 (information that, in reading the analysis for AB 499, surely, he did not have). My letters to him included the following: the Health Care Financing Administration (HCFA), the federal agency responsible for administering federal Medicaid waivers, actively encourages states to seek less costly alternatives for seniors at risk of institutionalization. Currently, there are 200 Medicaid waivers in effect in the nation, serving more than 250,000 people.

From a fiscal standpoint Medicaid waivers make sense. Thirty-eight states currently have a federal waiver to allow Medicaid to pay for RCFEs. Although cost savings on a state by state basis is difficult to evaluate (each state has a different number of seniors and a different reimbursement rate for SNFs and RCFEs) establishing cost neutrality, a requirement for any federal Medicaid waiver, is not. Unlike California, most large states, such as Florida, New York and Texas utilize Medicaid waivers for RCFEs and find them cost efficient. The success of Medicaid waivers is also evident by the many states which have dramatically increased the number of seniors eligible for such a program. Last year, for instance, Maryland allocated Medicaid assisted living funding for 750 seniors. This year, new legislation increased funding to cover 7,500 participants, a ten fold increase.

California already has many HCBS waivers which effectively keep seniors out of costly SNFs. MSSP is one such program. IHSS is another. But IHSS hours are limited and every month hundreds of seniors in California receiving IHSS transition from home to SNFs. Many of them could be in RCFEs, some as inexpensive as $1,000/month, but SSI pays $850/month and instead of MediCal subsidizing the difference, they are forced into SNFs at several times the cost to the state. Currently, California has no mechanism in place to determine if a senior transitioning from IHSS to a SNF truly needs to go there.

And what about those seniors residing in assisted living homes who run out of money? In one study prepared by the Florida Department of Elder Affairs, they discovered that each year 3,000 seniors living in assisted living homes were forced into SNFs because they ran out of funds In California, with more low income seniors residing in RCFEs than any other state, the situation is even worse.

The potential cost savings to California will be enormous when the state stops the flow of seniors from home to SNFs because of insufficient IHSS care hour funding, stops the flow of seniors who transition from RCFEs into SNFs each year because of insufficient funds and starts transitioning those seniors with custodial care needs currently in SNFs into RCFEs. By not having a HCBS waiver for RCFEs California also loses in a big way. From time to time HCFA offers states grant monies to develop a process for transferring residents who are unnecessarily in SNFs to RCFEs. For instance, on July 1, 1999, HCFA recently offered states the chance to apply for $500,000 in grant monies to study this issue. Ironically, since California currently has no waiver and no Medicaid mechanism in place to pay for RCFEs, they where unable to apply for this type of grant.

Surely, with all of our letters to Bill Werhle he would incorporate into his analysis the fiscal merits of SB 353 which perhaps eluded him when he did the analysis for AB 499.

After a very successful morning, John and I felt pretty elated. Political and fiscal issues pretty well covered, SB 353 was looking nice and pretty. Or so we thought. Our optimism soon faded when we met with Maureen Childs, Legislative Coordinator for the Department of Health Services, and Jackie Rodriquez, Legislative Coordinator for the Department of Social Services. To our astonishment we soon discovered that our known obstacles were nothing compared to the stealth obstacle which loomed before us. Apparently, the Department of Health was against the bill??!!

Why? There objections are best summarized in the Comments section of the Department of Finance report on this bill:

** Some of the population that would benefit from a RCFE assisted living waiver is already served under an existing federal waiver for the Multipurpose Senior Services Program (MSSP). Under the MSSP waiver, beneficiaries receive a variety of MediCal funded care, which may include residential care.

**A waiver for Medi-Cal residential care would likely lead to high administrative costs and a minimal increase in the availability of such services.

Apparently, the DHS was not aware that, in fact, MSSP has nothing whatsoever to do with paying for assisted living homes. And what administrative costs could possibly equal the potential millions of dollars in savings the state could realize by transitioning the thousands of seniors who are in or end up in unnecessarily in SNFs (the California Little Hoover Commission has estimated at least 30% of seniors in SNFs do not need to be there) into more affordable RCFEs?

We accomplished quite a bit in the half an hour meeting we had with Ms. Childs and with Ms. Rodriguez, but by this time it was too late in the process. The DHS halted SB 353 dead in it's tracks and when the smoke cleared a few days later, SB 353 was mired in suspend status. It now has become a two year bill. (As to the final fiscal analysis prepared by Bill Wehrle, word for word it was the exact same as for AB 499. Not one mention of any of the literature many of us sent to him with facts, figures and contact numbers for other state Medicaid directors).

Are we saddened and disheartened as to the eddies and whirls which have stalled SB 353? Not in the slightest. John and I are taking so much pleasure in working passionately on an issue that is of such crucial importance to so many seniors. Not only can we help the bill more by becoming savvy as to the political process but most importantly SB 353 in a way is in even a better position then it was before. Even if SB 353 had passed out of the Assembly (by cloaking it in a Democratic bill or having White Knights like Villaraigosa carry it through) it surely would have been vetoed by the Governor (if DHS didn't understand our bill, how could we expect the Governor's staff to make heads or tails of it?). Rather than reintroduce the bill and start from scratch (remember it already passed the Senate and is in the last committee before going for a full Assembly vote) SB 353 is in prime position to move forward once all the obstacles (stealth and otherwise) which confront it are surmounted.

With four months before more bills can be sent to the Governor we have a real opportunity to fine tune SB 353 and appease all of its detractors. We will be forming a task force comprised of various City and County agencies to flesh out the details of SB 353 to better supply information to the Department of Health about the details of this waiver and it's success in other States. (If you want to help in the process by being a worker bee, let me know). Those of us who believe in SB 353 will make it happen and I am confidant that once we pull together the proper resources and data we can convince the DHS, which ultimately is responsible for the health and well-being of citizens in California, of the merits of keeping low income seniors who do not need nursing care out of expensive SNFs.